An Evaluation of the Performance of Three Different Mutual Funds

Topics: Investment, Mutual fund, Bond Pages: 18 (5745 words) Published: January 7, 2013
Table of content

Content Page
1. Summary2
2. Five year return summary of the mutual funds2
3. Performance analysis of the funds
4. Conclusion and recommendation18
5. References19

The report of performance analysis consists of analysis of three mutual funds in Malaysia. These are RHB, CIMB, and PUBLIC Mutual. In order to analyse their performance, the return in terms of percentage (%) of 4 different funds were analysed. The four different funds are equity fund, balance fund, bond fund and money market fund. After the analysis done, conclusion and recommendation are provided.

| 5 Years|
Fund (%)| RHB| CIMB| Public|
Equity| 8.21| 9.23| 8.01|
Balanced| 8.83| 8.98| 8.37|
Bond| 7.08| 8.01| 7.38|
Money market| 2.31| 2.67| 2.44|

The equity, balanced, bond and money market fund return in % for the last five years of the three banks are shown above. The evaluation of the performance of the three banks will be done based on the following criteria: 1. Minimum investment amount

2. Investment objective
3. The names and experience of the fund managers
4. Historical record of the past performances
5. The exposure to various types of risks
6. The services offered by the MF (e.g. internet account, account checking, etc.) 7. The fees incurred by the MF (e.g. management, sales and annual fees) 8. The net asset value (NAV)
9. The growth of the fund
10. differences in product structure/design or trading mechanics. 11. Holding period return (HPR) over multiple horizons (from income and capital gain yield) 12. risk/volatility of prices/returns over multiple horizons 13. management and other fees charged

14. returns after adjusting for fees
15. Sharpe’s measure, geometric average return and other measures if feasible 16. performance during bull and bear market conditions
17. Any other interesting episodes/events relevant to performance during period of study. 18. Minimum amount

RHB Investment management
Fund Objective:
To achieve long term growth by mainly investing in public listed companies with growth potential, Islamic debt securities and other securities acceptable under the Shariah principles.
Note : Any material changes to the objective of the Fund require the Unit Holder’s approval. Investor Profile
Suitable for investors who prefer higher capital growth investments acceptable under the Shariah principles.

Asset Allocation:
Up to 95% of the Fund’s NAV will be invested in equities. Minimum of 5% of the Fund’s NAV will be invested in sukuk, Islamic debt instruments, Islamic money market instruments and/or liquid assets acceptable under Shariah principle Investment Strategy And Policy

RHB Islamic Growth Fund is geared towards investors who look for Shariah compliant instruments that provide long term capital appreciation. The Fund will be mainly investing in public listed companies with growth potential, sukuk, Islamic debt securities and other securities acceptable under the Shariah principles. Selection of equity investments of the Fund will be in line with those in the SC’s Shariah list which is updated and published twice a year. The External Investment Manager utilises a strategy that seeks attractively priced companies in undervalued sectors, or in sectors that have strong upward stock price momentum by seeking businesses that demonstrate strong increase in earnings per share and continue to strengthen their fundamental capabilities and competitive positions, amongst others. The Fund may invest in fixed income securities to preserve the value of the Fund under volatile market conditions. For fixed income securities, the Fund seeks investments amongst the Shariah compliant fixed income papers that are of investment grades. As such, the equities holding may be reduced.

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